Timid O’Farrell has to get on with job

NSW Premier Barry O’Farrell’s huge mandate means he has the political capital necessary to undertake substantial reform to improve the state’s finances, administration and infrastructure. Two reports released this week present Mr O’Farrell with a clear road map for what he should do as premier to transform the state. But he seems in no hurry to act.

The report from former Treasury head Mike Lambert recommends cutting stamp duty and replacing it with a land tax, eliminating gambling tax concessions for clubs and introducing a resource rent tax instead of royalties. Mr O’Farrell has chosen not to pursue any of these recommendations.

The Commission of Audit interim report, by adviser Kerry Schott, recommends assessing further asset sales, and the Premier said he would set up a unit to look into this. Forestry NSW and the road toll business owned by the RTA are considered the most likely candidates. And he has already announced legislation to sell off the $5 billion electricity generators, and a 99-year lease on Port Botany. But under pressure from the Liberal Party’s coalition partner, the Nationals, he ruled out a first-term sale of the power distribution and transmission networks, which could unlock up to $40 billion.

The NSW government is awash with consultants’ reports, and now it is time to act. Mr O’Farrell has to find $8 billion in spending cuts to fund the infrastructure investment he has promised. This will entail hard decisions on public service jobs, a review of public-sector IR practices and a thorough effort to rid the bureaucracy of the mismanagement and wasteful practices that are such a drag on the state’s finances.

Asset sales would allow more efficient private-sector operators to run businesses and would liberate the capital locked up in the state’s balance sheet which is better used to fund infrastructure that could clear out growth bottlenecks.It is time for the NSW Premier to dispense with his timidity and spend some of his immense political capital on the action needed to vastly improve the state’s infrastructure and administration.